Pricing strategies for combination pediatric vaccines based on the lowest overall cost formulary.

This paper analyzes pricing strategies for US pediatric combination vaccines by comparing the lowest overall cost formularies (i.e., formularies that have the lowest overall cost). Three pharmaceutical companies compete pairwise over the sale of monovalent and combination vaccines. Particular emphasis is placed on examining the price of Sanofi Pasteur's DTaP-IPV/HIb under different conditions. The main contribution of the paper is to provide the lowest overall cost formularies for different prices of DTaP-IPV/HIb and other Sanofi Pasteur vaccines. The resulting analysis shows that DTaP-IPV/HIb could have been more competitively priced compared with the combination vaccine DTaP-HepB-IPV, for federal contract prices in 2009, 2010 and 2011. This study also proposes the lowest overall cost formularies when shortages of monovalent vaccines occur.